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Borrowing money can sometimes lead to problems further down the line. If you’re looking to reduce the costs of multiple or troublesome debts, the following steps may help.

Get organised
First, use IEC’s nifty debt calculator to get a clear overview of your financial situation. Simply input your various debts – credit cards, personal loans, and others – and their details into the tool, and take a look at where you currently stand.

Regardless of the outcome, there are options open to you. Here are a few simple steps you can take to manage and reduce your debt, and take steps towards a debt-free future!

Prioritise your payments
Keep up to date with your payments every month, so costs don’t spiral. If you’re able, try to pay more than just the monthly minimum, particularly for debt with higher interest rates.

As a rule, you should target first your high-interest loans rather than your lower-interest ones, as high interest lending costs more.

Consolidate and reallocate
If you have multiple credit cards to pay off, consider consolidating them. By wrapping them all into one bundle, you can keep track of your debt more easily, and you could benefit from lower interest rates than for the initial debt. Once you’ve allocated all your debt to a single card or loan, cancel those unnecessary credit cards you have to avoid temptation, and make sure to keep up with the payments!

You could also consider borrowing money at a lower interest rate to pay off high-interest loans, as this will save you from being crippled by ever-climbing interest fees. A good example of this is credit card debt; as this often has very high rates of interest, paying it off is top priority. When done sensibly, swapping to loans with lower interest rates or shorter repayment terms can benefit you.

Struggling? Ask for support
Don’t be ashamed to ask for help if you need it. Reach out to family, friends, and financial advisers – don’t suffer in silence. To get more informed on which steps to take next, check out IEC’s guide to managing debt.